Market last week: light industry manufacturing sector index rose. From May 16, 2022 to May 20, 2022, the Shanghai Composite Index rose 2.02%, the Shenzhen Component Index rose 2.64%, and the light industry manufacturing index rose 2.32%, ranking 13th among the 28 Shenwan industries; The rise and fall of light industry manufacturing index sub sectors from high to low are: packaging and printing (+ 3.91%), household light industry (+ 2.48%) and papermaking (+ 0.34%).
Furniture: the real estate policy continues to increase and pay attention to investment opportunities in the home sector. 1) Domestic sales: the marginal relaxation of real estate policy or boost the home sector. Through the historical performance of the downward cycle of the resumption of real estate, we believe that: 1) the signal of marginal relaxation of real estate policy, and the real estate sales data usually take 3-6 months; 2) The market repair of the household sector is earlier than the performance repair, and usually starts the upward trend when the real estate policy is loose and the real estate sales data pick up; 3) The leading performance has strong toughness, and gradually separated from the real estate sales data to achieve steady growth. On May 20, 2022, Suofeiya Home Collection Co.Ltd(002572) brand milanna held a press conference to launch milanna’s whole ecological strategy, and Suofeiya Home Collection Co.Ltd(002572) packaging channel layout was further improved. With the relaxation of real estate policy and the gradual control of the epidemic, the valuation of the home sector is expected to continue to repair. Recommend [ Suofeiya Home Collection Co.Ltd(002572) ], which is expected to accelerate retail under the improvement of management and the whole strategy; The pioneer of retail reform and the increasingly clear route of big home [ Jason Furniture (Hangzhou) Co.Ltd(603816) ]; [ Xlinmen Furniture Co.Ltd(603008) ], [ Oppein Home Group Inc(603833) ] whose leading position of overall high growth and [ Oppein Home Group Inc(603833) ] and the functional sofa leader [Minhua holdings] whose valuation is low, we suggest to pay attention to [ Zbom Home Collection Co.Ltd(603801) ], [ Goldenhome Living Co.Ltd(603180) ]. 2) In terms of export: from May 16, 2022 to May 20, 2022, the exchange rate of the US dollar against the RMB fluctuated at a high level. Benefiting from the positive signal of RMB devaluation and the easing of China US business relations, the performance of relevant targets of the export chain is expected to be realized gradually. Recommend [ Cocreation Grass Co Ltd(605099) ], the global leader in artificial turf industry [ Healthcare Co.Ltd(603313) ], and [ Hefei Metalforming Intelligent Manufacturing Co.Ltd(603011) ] with gradual repair of overseas orders and predictable reversal of difficulties. It is suggested to pay attention to [ Zhejiang Walrus New Material Co.Ltd(003011) ], which drives high income growth and strong bargaining power.
Papermaking: the short-term pulp price may remain high and volatile, and the medium and long-term supply and demand pattern is expected to improve. In terms of price, as of May 20, 2022, the latest price of wood pulp was 7404.5 yuan / ton, with a weekly increase of 13 yuan / ton; The latest price of carton board paper is 4852 yuan / ton, with a decrease of 20 yuan / ton on a weekly basis; The latest price of corrugated paper is 3740.6 yuan / ton, with a decrease of 44 yuan / ton on a weekly basis; The latest price of white cardboard was 6440 yuan / ton, unchanged on a week-on-week basis; The latest price of whiteboard is 4705 yuan / ton, with a decrease of 138 yuan / ton on a weekly basis; The latest price of double copper paper was 5590 yuan / ton, unchanged on a week-on-week basis; The latest price of double offset paper is 6137.5 yuan / ton, with a decrease of 13 yuan / ton on a weekly basis. The strikes in Chile and Finland have been resolved, but it still takes time for the pulp plant to resume normal operation. Taylor factory in canFor will continue to reduce production due to the backlog of supply chain and the shortage of rail cars. It is expected that the pulp price will remain high and volatile in the short term. In the medium term, the supply and demand pattern is expected to improve, and we expect the pulp price center to move down in 2023. Under the background of rising costs, the industry continued to differentiate, the profitability of leading enterprises was repaired month on month, some production capacity of small and medium-sized enterprises was cleared, and the competition pattern was further optimized. Benefiting from the energy difficulties of papermaking enterprises in Europe and other regions, the impact of overseas paper imports has weakened, which is good for the export of Chinese paper enterprises. Under the promotion of the new regulations of teaching materials and the 20th National Congress, the price increase of cultural paper is expected to be implemented in May. It is recommended that [ Shandong Sun Paper Co.Ltd(002078) ]: the valuation has a margin of safety, the forest area of Laos base continues to grow, and the cost advantage and risk resistance are improved under the integration of Forest Pulp paper.
E-cigarette: the license improves the entry threshold of the industry and improves the ecological health of the industry. 1) According to the regulatory time node plan issued by the state tobacco administration, e-cigarette manufacturers can start applying for production licenses from May 5. During the transition period from May to October, the expansion of production capacity of new e-cigarette production enterprises and existing e-cigarette production enterprises will be limited, and the first batch of production licenses will only be issued to existing e-cigarette production enterprises. China’s excellent brands and leading enterprises with large existing production capacity and high product quality may benefit. The national standard of e-cigarette has high requirements for the safety, stability and harm reduction attributes of e-cigarette products. We reiterate that the license will raise the threshold of e-cigarette manufacturing industry and ensure the medium and long-term healthy development of e-cigarette industry. 2) Release the layout planning of e-cigarette retail outlets in many places. As of May 20, 2022, 48740 e-cigarette retail licenses have been planned in China. Only Shandong Province and Shanghai have not disclosed the specific number of licenses. Compared with the 58759 professional e-cigarette retail stores in 2021 counted by the e-cigarette Association, the overall decline is limited. The short-term market scale may be disturbed by the implementation of policies, but the medium and long-term penetration is expected to continue to increase. Recommend [SIMORE international] with outstanding valuation cost performance after correction; It is suggested to pay attention to [fog core technology] which is expected to continue the advantages of brand and user volume.
Risk tip: power rationing policy affects production capacity, raw material price fluctuations, intensified Sino US trade frictions, weak downstream demand, etc.
